Posted: 4/30/2026 10:58:47 AM EDT
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I have a 457b, and retired from my police job 8 years ago. I understand that there is no penalty for me to withdraw this money before I'm 59.5, like there is for other types of accounts. Does that mean I do not need to do a ladder style Roth conversion, I can just do a ladder style conversion, pay my taxes accordingly, and invest it in NON-Roth funds? I'm 53, collecting a pension, still working, hoping to retire completely in 5 years. |
"anarcho-tyranny"—They refuse to control real criminals so They control the innocent.
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Originally Posted By ADKRebel: I have a 457b, and retired from my police job 8 years ago. I understand that there is no penalty for me to withdraw this money before I'm 59.5, like there is for other types of accounts. Does that mean I do not need to do a ladder style Roth conversion, I can just do a ladder style conversion, pay my taxes accordingly, and invest it in NON-Roth funds? I'm 53, collecting a pension, still working, hoping to retire completely in 5 years. You don't need to do anything - let it grow tax deferred and make withdrawals later when your income is lower and you are in a lower tax bracket. You say "invest in non-roth funds" and that is ambiguous since there is no such thing as "roth funds". You need a financial plan that prioritizes minimizing taxes - there is a fortune you can avoid (or not) in taxes while transitioning into retirement. This is doubly true if you plan to quit working before claiming SS - those lower income years provide enormous opportunity. |
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Originally Posted By Morgan321: 457b is a pre-tax account so all withdrawals (or conversions) will be taxed. I don't know about the penalty but I would assume there will be one for withdrawals before 60. You don't need to do anything - let it grow tax deferred and make withdrawals later when your income is lower and you are in a lower tax bracket. You say "invest in non-roth funds" and that is ambiguous since there is no such thing as "roth funds". You need a financial plan that prioritizes minimizing taxes - there is a fortune you can avoid (or not) in taxes while transitioning into retirement. This is doubly true if you plan to quit working before claiming SS - those lower income years provide enormous opportunity. Just a side note on 457b accounts….it is possible to have a Roth option on a 457b account. It’s pretty neat to be able to contribute up to $24,500 (or more if older than 50) a year to a Roth account….plus have a Roth IRA. I don’t think it sounds like the OP had that option when he was contributing to it but I don’t know for certain. There normally is no penalty for withdrawals before 59.5 from a 457b account. Normal taxes would be due on withdrawals if the money was put in pretax. |
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